Desert bloom: JLR set to build Saudi plant

After striking a deal with Chery Automobile to build vehicles in China, Tata Motors-owned Jaguar Land Rover now aims to expand its manufacturing footprint to Saudi Arabia.

The British luxury carmaker, which was once struggling, turned around under the Tata stewardship to report £13.5 billion (Rs 117,900 crore) revenue last fiscal. JLR has now embarked on a global expansion drive with sales poised to touch a record 350,000 units this year.

While the company said the detailed investment plan and production capacity in Saudi Arabia will be firmed up in 2013, agencies reported that the Saudi project has $4.5 billion (Rs 24,420 crore) investment to build a 50,000 unit plant by 2017, as detailed in a press release at the signing ceremony in Riyadh.

The Saudi plant is the latest in the series of progressive steps by JLR that includes scaling up of capacity in UK plants, new engine manufacturing facility, the assembly operation in India and the joint venture plant in Shanghai, China, which is under development. JLR and National Industrial Clusters Development Programme in the Kingdom of Saudi Arabia signed a letter of intent for a partnership.

JLR's foray aims to tap the rich Gulf market.West Asia and Africa clocked 11,428 units in January-November - 3.5% of JLR's sales. Saudi Arabia is looking at investments in manufacturing in its bid to diversify the economy, which is now heavily dependent on oil exports.

"Discussions between Jaguar Land Rover and the Saudi government are at a preliminary stage, although opportunities have already been identified in aluminium component production," said a company release here. The world's largest integrated aluminium complex, a JV between Saudi Arabian mining company and Alcoa of the US, is due to start production in 2014 at the Ras Al Khair facility.